The Public–Private Pension Mix and Old Age Income Inequality in Europe

2011 ◽  
pp. 384-422 ◽  
Author(s):  
Bernhard Ebbinghaus ◽  
Jörg Neugschwender
Keyword(s):  
Income Inequality ◽  
Old Age ◽  
Private Pension ◽  
The Public

scholarly journals Die Deutschlandrente: Wirksamkeit und Legitimität eines Nudges

2018 ◽  
Vol 87 (2) ◽  
pp. 33-46
Author(s):  
Andreas Knabe ◽  
Joachim Weimann
Keyword(s):  
Old Age ◽  
Private Pension ◽  
Retirement Savings ◽  
Pension Insurance ◽  
The Public ◽  
Opt Out ◽  
Private Altersvorsorge ◽  
Gesetzliche Rentenversicherung ◽  
Old Age Provision ◽  
Do So

Zusammenfassung: Der demografische Wandel wird die umlagefinanzierte gesetzliche Rentenversicherung in den kommenden Jahrzehnten stark belasten. Bisherige Rentenreformen zielten daher darauf ab, durch steuerliche Förderung die zusätzliche kapitalgedeckte Altersvorsorge zu stärken. Diese Möglichkeit wird aber bisher nur unzureichend in Anspruch genommen. Wir machen dafür vor allem zwei Ursachen verantwortlich. Zum einen ist gegenwärtig die private Altersvorsorge nach dem „Opt-In“-Prinzip organisiert. Nur derjenige sorgt zusätzlich vor, der sich aktiv dafür entscheidet. Zum anderen weisen viele private Rentenversicherungen hohe und vor allem intransparente Kosten auf. In der Folge halten sich viele Verbraucher bei der privaten Altersvorsorge zurück. Wir haben einen Vorschlag entwickelt, wie diese beiden Probleme gelöst werden können. Unser Modell der „Deutschlandrente“ sieht vor, bei der geförderten privaten Altersvorsorge vom „Opt-In“ zum „Opt-Out“ zu wechseln. Internationale Erfahrungen zeigen, dass ein solcher „Nudge“ zu einem deutlichen Anstieg der Ersparnisbildung führen kann. Um den Wettbewerb zu stärken, soll ein staatlich organisierter Rentenfonds eingeführt werden, der ein einfaches und kostengünstiges Vorsorgeprodukt anbietet und in fairem Wettbewerb zu privaten Anbietern steht. Die Kombination beider Maßnahmen kann die private Altersvorsorge effektiv und kostengünstig stärken. Summary: Demographic change is projected to impose a substantial burden on the public pay-as-you-go pension insurance in Germany in the next decades. Past pension reforms have thus aimed at encouraging additional private old-age provision in fully-funded pension insurances. A substantial share of the population, however, still has no or only insufficient private retirement savings. Two reasons are responsible. First, private pension provisions follow the „Opt-In“ principle. Only who actively decides to save will do so. Second, many private pension providers charge high and nontransparent fees. This keeps many consumers from saving more for their old age. We have developed a proposal that solves both problems. In our model “Deutschlandrente”, private old-age provision will be organized according to an opt-out- instead of „Opt-In“-principle. International experiences show that such a “nudge” would cause sizable increases in pension savings. To strengthen competition, a publicly organized pension fund will be introduced. This fund will offer a simple and inexpensive pension product and compete fairly with existing private providers. The combination of both measures can strengthen private old-age provision effectively and inexpensively.

Growing Inequality and Public Awareness of Inequality in the States

2017 ◽  
Author(s):  
William W. Franko ◽  
Christopher Witko
Keyword(s):  
Public Opinion ◽  
Income Inequality ◽  
Public Awareness ◽  
Public Concern ◽  
The Public ◽  
Political Conditions ◽  
Perceptions Of Inequality ◽  
Public Opinion Polls ◽  
Opinion Polls

Here the authors present the variation that exists in income inequality across the states, and variation in public awareness or concern about income inequality as measured by public opinion polls. Though politicians may decide to tackle income inequality even in the absence of public concern about inequality, the authors argue that government responses are more likely when and where there is a growing awareness of, and concern about, inequality, which is confirmed in the analyses in this book. To examine this question in subsequent chapters, a novel measure of public awareness of rising state inequality is developed. Using these estimates, this chapter shows that the growth in the public concern about inequality responds in part to objective increases in inequality, but also that state political conditions, particularly mass partisanship, shape perceptions of inequality.

The transition to a multi-pillar pension system: the inherent socio-economic anomaly

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ishay Wolf ◽  
Jose Maria Caridad y Ocerin
Keyword(s):  
Income Inequality ◽  
Old Age ◽  
Pension System ◽  
Economic Loss ◽  
Pension Scheme ◽  
Total Contribution ◽  
Content Type ◽  
Pension Systems ◽  
High Earning ◽  
Minimum Pension

Purpose This paper aims to analytically show that in an over-lapping-generation (OLG) model, low earning cohorts bear unwanted risk and absorb higher economic cost than high earning cohorts do. Design/methodology/approach This paper aims to consider the individual's risk appetite, using a simple utility function, based on consumptions and discount rates in each period. This paper calibrates the model according to teh Israeli pension system as a representative of a small open developed organization for economic cooperation and development country. Israel is considered as unique case study in the pension landscape, as it implements almost pure defined contribution pension scheme with continuous trend of pension market capitalization (Giorno and Jacques, 2016). Hence, this study finds Israel suitable for examining the theoretical mix of pension scheme. That model enables exploring combined solutions for adequate old age benefits, involving the first and the second pension pillars, under fiscal constraints. Findings It comes out that for risk-averse individuals, the optimal degree of funding is negatively correlated to asset returns' volatility and positively correlated to earning decile level. The neglect of risk and individual's current earning level will thus overstate the contribution level and funded percentage from total contributions. Moreover, even in an economy with minimum government intervention, and highly developed private pension fund with high average of rate of return, the authors find it is optimal that the pension system contains a sizeable unfunded pillar. This paper innovates by revealing a socio-economic anomaly in design of mix pension systems in favor of high earning cohorts on the expense of economic loss of low earning cohorts. Practical implications The model presented in this paper could be implemented in countries with mix pension systems, as an alternative to public social transfers or means tested, alleviating poverty and inequality in old age. Additionally, this model could raise the public awareness of the financial sustainability of the unfunded pay-as-you-go pillar to diversify financial risk in pension systems, especially for low earning cohort in society. Social implications One area of research that is particularly relevant in this context concerns the issue of alleviating poverty and income inequality. It is often stressed that the prevention of old age poverty is among the central targets of well-designed pension system (Holzmann and Hinz, 2005). The conceptualization of minimum pension guarantee used in this composition allows to clearly capturing the notion of such a poverty and social targets as an integral part of the pension system rolls. Originality/value This paper innovates by revealing a socio-economic anomaly in design of mix pension systems in favor of high earning cohorts on the expense of economic loss of low earning cohorts. That comes to realize through the level of total contribution rates and funded share that are generally optimal for high earning cohorts but not for low earning cohorts. This paper identifies that the effect of anomaly is most significant in a market characterized with high income-inequality level. This paper finds that imposing intra-generational risk sharing instrument in the form of minimum pension guarantee can re-balance pension design among different earning cohorts. This solution demonstrates balancing effect on the entire economy.

On the Life Assurance Companies of Germany—their Constitution, Condition and Prospects: being the substance of a Paper presented to the Institute of Actuaries

1853 ◽  
Vol 3 (2) ◽  
pp. 134-147 ◽  
Author(s):  
Herr Rath G. Hopf
Keyword(s):  
Old Age ◽  
Successful Development ◽  
The Public ◽  
Life Assurance ◽  
High Profit ◽  
Mode Of Life

Next to England, Germany is the country in which the principles of life assurance have had the most successful development. It is true the more recent French Companies, La Caisse Paternelle, L'Equitable, La Caisse des Ecoles et des Families, which also call the assurances granted by them assurances sur la vie, show a greater extension in a shorter time; but what they guarantee to the public are not life assurances in our sense of the word. They are neither assurances granted for previously specified sums, nor is the payment of the claim dependent on the death of the assured. The more modern French life assurances are rather indefinite reversions obtained by paying in any sum the assured pleases, the interest of which (as in the Tontines), according to the mortality found to prevail in the different classes, may prove sometimes greater, sometimes less, and is only divided amongst those who attain the term of life which may have been previously agreed on. The contributions of those who die early, together with the interests thereon, go to augment the dividends to the surviving members. Whilst life assurance amongst the English and Germans is therefore calculated to be on the death of the assured a source of provision for their families, the more recent mode of life assurance amongst the French principally aims at granting to the assured himself, in his lifetime, an annuity or sum of money, which, increasing according as the computations are made for an earlier or later period, affords him the means of extending his business, of completing his education, of securing a dowry on marriage, or a provision in old age. In consequence, partly of the prospect of selfenjoyment of the reserve thus made, partly the possibility of obtaining a high profit for a small investment through a greater mortality in the classes than the tables assumed, this kind of assurance became very much in vogue amongst the French. Recently, however, a clearer understanding of the matter, and the exposure of some deceptions which a few of the Companies or their managers have been guilty of, have in some degree cooled the public favour.

scholarly journals Growing Income-Based Inequalities in Old-Age Life Expectancy in Sweden, 2006–2015

Demography ◽  
2021 ◽  
Author(s):  
Stefan Fors ◽  
Jonas W. Wastesson ◽  
Lucas Morin
Keyword(s):  
Income Inequality ◽  
Life Expectancy ◽  
Life Span ◽  
Old Age ◽  
Remaining Life ◽  
Neighborhood Deprivation ◽  
Income Gap ◽  
Remaining Life Expectancy ◽  
Mortality Improvement ◽  
Income Quartile

Abstract Sweden is known for high life expectancy and economic egalitarianism, yet in recent decades it has lost ground in both respects. This study tracked income inequality in old-age life expectancy and life span variation in Sweden between 2006 and 2015, and examined whether patterns varied across levels of neighborhood deprivation. Income inequality in remaining life expectancy at ages 65, 75, and 85 increased. The gap in life expectancy at age 65 grew by more than a year between the lowest and the highest income quartiles, for both men (from 3.4 years in 2006 to 4.5 years in 2015) and women (from 2.3 to 3.4 years). This widening income gap in old-age life expectancy was driven by different rates of mortality improvement: individuals with higher incomes increased their life expectancy at a faster rate than did those with lower incomes. Women with the lowest incomes experienced no improvement in old-age life expectancy. Furthermore, life span variation increased in the lowest income quartile, while it decreased slightly among those in the highest quartile. Income was found to be a stronger determinant of old-age life expectancy than neighborhood deprivation.

scholarly journals The Limits of Income Inequality: Public Support for Social Policy across Rich Democracies

2017 ◽  
Author(s):  
Nate Breznau ◽  
Carola Hommerich
Keyword(s):  
Public Opinion ◽  
Income Inequality ◽  
Social Welfare ◽  
Public Support ◽  
The Public ◽  
The Social ◽  
Liberal Societies ◽  
Institutional Contexts ◽  
English Speaking ◽  
Income Concentration

Does public opinion react to inequality, and if so, how? The social harms caused by increasing inequality should cause public opinion to ramp up demand for social welfare protections. However, the public may react to inequality differently depending on institutional context. Using ISSP and WID data (1980-2006) we tested these claims. In liberal institutional contexts (mostly English-speaking), increasing income inequality predicted higher support for state provision of social welfare. In coordinated and universalist contexts (mostly of Europe), increasing inequality predicted less support. Historically higher income concentration predicted less public support, providing an account of the large variation in inequality within the respective liberal and coordinated contexts. The results suggest opinions in liberal societies – especially with higher historical inequality – reached the limits of inequality, reacting negatively; whereas in coordinated/universalist societies – especially with lower historical inequality – opinions moved positively, as if desiring more inequality.

scholarly journals Risk factors for tuberculosis in contact investigations in Rotterdam, the Netherlands

2012 ◽  
Vol 4 (2) ◽  
pp. 26 ◽  
Author(s):  
Jesse Eduard Verdier ◽  
Sake Jan De Vlas ◽  
Inge D. Kidgell-Koppelaar ◽  
Jan Hendrik Richardus
Keyword(s):  
Risk Factors ◽  
The Netherlands ◽  
Old Age ◽  
Latent Tuberculosis ◽  
Index Patient ◽  
Active Tuberculosis ◽  
Tuberculosis Case ◽  
Tuberculosis Patients ◽  
The Public ◽  
Contact Investigations

Contact investigations around tuberculosis patients enable early detection of infection and disease, and prevention of secondary tuberculosis cases. We aim to identify risk factors for <em>M. tuberculosis </em>transmission to contacts of tuberculosis patients, based on unique data from routine contact investigations by the Public Health Service in Rotterdam, the Netherlands, collected between 2001 and 2006. Through logistic regression analysis, we determined the effect of various risk factors on the chance of finding a latent tuberculosis (TB) infection or overt tuberculosis case among contacts. A total of 1165 index patients with active tuberculosis were registered and at least one contact was investigated in 731, resulting in 21,540 contacts overall. Altogether, the contact investigations led to 91 cases of active tuberculosis. Of the 12,698 contacts eligible for screening by tuberculin skin test, 1091 (9%) were diagnosed with latent tuberculosis infections. Risk factors were old age of the contact, old age of the index patient, and the relationship to the index. A larger fraction of infected close contacts was strongly associated with infections among more distant contacts. Our findings emphasize the importance of including these personal and interpersonal risk factors in decision making in contact investigations.

Paying for Old Age: Past, Present, Future

2006 ◽  
Author(s):  
Mark Thomas ◽  
Paul Johnson
Keyword(s):  
Old Age ◽  
Government Policy ◽  
Ageing Population ◽  
Social Security Systems ◽  
Security Systems ◽  
Old Age Support ◽  
The Public ◽  
History Of ◽  
History Of Old Age ◽  
The Uk

This chapter focuses on one fundamental aspects of an ageing population — how to pay for old age, individually and collectively. It also presents a study of the history of old age support in the UK and US and concludes that despite the quite different beginnings of the public pension and social security systems, government policy in both countries has become similarly locked in to a set of institutional arrangements which were devised to respond to immediate social and economic problems, but which have acquired a rationale and a dynamic of their own.

scholarly journals Migrants’ Access to Social Protection in Romania

2020 ◽  
pp. 361-377
Author(s):  
Irina Burlacu ◽  
Sorina Soare ◽  
Daniela Vintila
Keyword(s):  
Life Cycle ◽  
Income Inequality ◽  
Welfare State ◽  
Old Age ◽  
Social Protection ◽  
Welfare System ◽  
Social Benefits ◽  
Social Policies ◽  
Life Cycle Stages ◽  
Social Provisions

Abstract This chapter examines to what extent the Romanian welfare system covers resident citizens compared to foreigners residing in Romania and Romanians living abroad. In doing so, we analyse existing social policies aiming to ensure their coverage against a variety of risks at different life-cycle stages, including unemployment, poverty, sickness and old-age. The main conclusion is that the Romanian welfare state is open to all residents, regardless of their nationality, thus providing everyone equal grounds for accessing social benefits. The criterion of residence on the Romanian soil is, however, prevalent. This implies that relatively few social provisions are extended for non-resident Romanians, which represent an increasingly sizeable community given the intensity of migration outflows in recent years. Furthermore, the Romanian social protection system has had relatively little impact on reducing the risk of poverty and income inequality in the country, despite regular amendments during the last years.

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